I have the extreme pleasure to speak to many manufacturing executives and professionals. I primarily deal with Consumer Products and Food & Beverage companies but, manufacturing as well. And there are commonalities between manufacturers regardless of the products they make. Getting the opinions of people in other segments helps broaden my perspective.
Fixing something that work already?
Across the board, regardless of segment, I hear the same phrase when the project of moving supply chain planning processes from spreadsheets to a dedicated supply chain planning system is discussed. In most cases, the phrase I hear most is; “why fix something that isn’t broken?” Food and beverage manufacturers use this phrase all the time for many processes and systems. These profit margin strapped businesses try to spend their money on investments on projects that will improve their bottom line, yield, quality and customer fill rate.
You know the drill. Investments need to be tangible.
Many investments include a new packaging line to potentially reduce overtime or even add an overtime shift. You know the drill. Investments need to be tangible. When it comes to planning the dynamics of your supply chain functions, there is nothing more tangible than an intelligent planning system. Nothing impacts bottom line, yield, quality, fill rate and the need for overtime more than accurate, connected and agile supply chain planning and tools. In the past, spreadsheets were satisfactory tools for basic planning function management.
Today’s world of constant disruption, daily behavioral changes in the market, the drive to sustainability and the need for up to the second information needs intelligent processes and systems spreadsheets just can’t provide. The spreadsheet planning process might not be broken, but it certainly needs to be fixed. So let’s look at a few reasons why.
Spreadsheets Do Not Model The Supply Chain Needed Today
To succeed in today’s insanely disruptive and competitive marketplace, CPG companies and frankly, all manufacturers need the “silos” of the supply chain removed. There have been walls between the distribution, production and supply pillars of supply chain planning for years. This is due to lack of technology and lack of the right processes. Spreadsheets promote silos. They are not collaborative, not interactive and do not allow information to flow.
Manufacturers have two supply chains; the physical supply chain consisting of the actual products and materials and then the digital supply chain which moves the data. If these two chains are not in synch, there is failure. Spreadsheets are single user tools, not collaborative and don’t encompass the entire picture. They are segmented. We can’t have segmented supply chains today. They need to be connected and need products and information to flow.
Spreadsheets promote silos. They are not collaborative, not interactive and do not allow information to flow.
Spreadsheets Lack Optimization and True Scenario “what-if” Planning.
I mentioned before that manufacturers are judicious when it comes to spending. They have to be. When manufacturers make a capital investment, it typically involves adding or upgrading equipment or production assets to increase throughput to better serve customers. Now why is this? Many people will answer this by saying “we need more capacity to meet customer demand”. That may be true. But I would then ask the following; how do you know? And, are you sure? In many cases, a new packaging line, upgraded equipment etc. could without question increase capacity and improve customer fill rates.
But, could there be a chance that with a system that can give you item level forecasts, plan distribution, plan manufacturing at an optimal level and link those plans back to your suppliers help you better manage current capacity? Spreadsheets lack the intelligence needed to evaluate scenarios, link all three areas of planning through analysis and real time data.
Spreadsheets Do Not Promote Collaboration Across the Entire Ecosystem.
When people think of “collaborative planning” they immediately think of the planning processes within their own organization. This collaboration is essential and critical, but to have an agile supply chain, collaboration needs to include customers, suppliers and all trading partners including contract manufacturers and other businesses and organization that make up your ecosystem. Spreadsheets are not cloud friendly and are difficult to share between organizations and multiple people. Sophisticated planning systems and tools have the availability to share information collaboratively through EDI processes and other means that simply do not work effectively with spreadsheets. Today’s environment requires quick, interactive information and communication which is much more reliable, easier and effective with interactive and intelligent tools.
Spreadsheets in some environments might still work. However, implementing a singular, collaborative, intelligent supply chain planning platform provides manufacturers the ability to increase productivity and profits. Finally, these tools provide end to end visibility across the entire supply chain and between all people in the ecosystem not just the manufacturing organization. These systems are scalable and automated that minimizes mistakes, saves time and allows for all to see real time information in real time at the same time. Most importantly, planning systems synchronize the physical and digital supply chains which are absolutely critical to compete in today’s disruptive world.